A growing number of employees is asking to reduce or stop their pension contributions amid the cost-of-living crisis.
According to a poll by LCP, 51% of employers are reporting that staff have requested to cut their pension contributions, with 47% having received requests to stop contributions altogether. Another 10% are expecting both to happen.
The survey of 10,000 employees and 500 organisations also shows that saving for a pension has fallen from first to sixth place in people’s financial priorities. It has been replaced by budgeting and managing everyday money.
More people are feeling financially vulnerable earlier in the pay cycle, with 21% of employees feeling concerned, negative and unable to cope with their finances in the first few days after payday. This rises to 32% halfway through the pay cycle, and 45% in the few days before payday. These figures are all up by 10% on last year.
Nearly two-thirds (65%) of staff have borrowed money, up from 59% in 2022, while 19% said they had taken money out of their savings and 6% had used a loan shark.
More than half (55%) of employees have struggled to cope with daily life in the past year. LCP estimates that a firm of 2,500 people loses £1,157,867 per year due to employees taking time off or dealing with personal issues during work time.
